Dusseldorf Anyone who asks operators of German grocery delivery services when they want to be profitable usually gets incredulous looks. In any case, high-speed services such as Gorillas or Flink only aim to gain market share as quickly as possible – even if they burn up investor money in the process. But even the market leader Rewe Digital has not made an announcement ten years after it was founded when it wanted to earn money.
The Czech attacker Rohlik, who has been present in Munich under the Knuspr brand for a few months, has other goals. Germany boss Erich Comor is convinced that Germany will work profitably in two years. In the Czech Republic and Hungary they finally managed to do that.
The competition between the grocery delivery services in Germany is entering the decisive phase. More than a dozen vendors are fighting for customers. And the first numbers of Knuspr’s expansion indicate that the provider could set new standards even in this competitive environment.
Delivery services are particularly crowded in Munich: Bringmeister, Rewe and Amazon Fresh with a full range, plus fast delivery companies such as Gorillas and Flink. Nevertheless, Knuspr managed to win 20,000 customers there in just three months. 1500 orders are shipped every day, and this number is expected to rise to 2000 by the end of the year.
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“We have the know-how,” says Comor confidently, “we have built a functioning business model in the Czech Republic that we can transfer to other countries.” This has been shown in Hungary and currently also in Austria.
Order is with the customer within three hours
On average, Rohlik has almost doubled its sales annually over the past few years. The company’s goal is to increase sales in Europe to five billion euros by 2024. Rohlik has just announced expansion into Italy, Romania and Spain.
But a large part of the growth should come from the German market. “We want to occupy a third of the online food market by the end of 2024,” says Comor. Until then, he wants to deliver in the regions around the 15 largest German cities.
Sales in Germany should then be 1.2 billion euros. That would make Knuspr number 1 – even before today’s market leader Rewe Digital.
Matthias Schu, e-commerce expert from the Lucerne University of Applied Sciences and Arts and author of the standard work “Das E-Food-Buch”, thinks this is quite realistic. “There is definitely a chance that Knuspr could advance to number one in the medium term,” he confirms.
He sees the great advantage of Knuspr in the short delivery times. The company is the only full-line supplier that is available to customers within three hours of the order being placed. Rewe or Amazon deliver the next day at the earliest. Fast delivery services such as Gorillas, which deliver in ten minutes, usually have a very limited selection of under 2000 items.
Demand grows faster than supply
Knuspr, on the other hand, already has 12,000 products on offer and wants to expand that to 20,000. The decisive factor is the strong focus on freshness, organic and regionality, praises expert Schu. “These are the current megatrends among customers,” he observes.
What is good for attackers like Knuspr: The market is currently growing so rapidly that the delivery services have barely cannibalized each other. “In the German e-food market, companies are in a paradisiacal state, as in the German economic miracle of the post-war period,” explains Schu. “The demand far exceeds the supply and capacity of the current providers.”
According to a study by the retail research institute IFH Cologne, the total market for the food retail trade in Germany will be around 240 billion euros this year. Only two percent of this is due to online trading. According to the forecast, the delivery business could grow by 17.3 percent per year by 2030 and then, in the best case, reach a share of eight percent.
Study author Eva Stüber also emphasizes that growth is limited by supply, the demand for even higher growth would be there. “Our surveys show: There is great demand for food delivered, many customers would like to use this service,” says the IFH’s e-commerce expert.
Discounters like Aldi and Lidl are still hesitating
Accordingly, Knuspr does not look so much at the other delivery services. “Our competitors are not the online players,” explains Germany boss Comor. “We’re competing against the big grocers.”
And so far they have made little effort to compete with the start-ups in this market. Only Rewe has its own delivery service, Edeka is largely limited to participating in the Dutch delivery service Picnic. Aldi and Lidl are still waiting and are only testing delivery models in selected foreign markets.
“Waiting for the traditional supermarkets and discounters to continue to wait before entering online trading,” warns expert Stüber. “Even if delivery services only conquered 4.9 percent of the market in 2030, that would be equivalent to the business of 2900 supermarkets.”
Meanwhile, startups like Rohlik continue to invest in their delivery infrastructure. The company is now installing the AutoStore storage system in its distribution centers, which largely automates the warehouse and triples productivity when it comes to putting together orders. The company plans to invest around 400 million euros in these systems.
Parent company Rohlik rated as unicorn
In order to be able to cope with the strong growth, Rohlik has already completed two financing rounds this year. In March, the company received 190 million euros from a group of investors led by the venture capital firm Partech.
Another round with a volume of 100 million euros followed in July, led by Index Ventures. Rohlik was valued at more than one billion euros, so it can be described as a so-called unicorn.
Another important element of Rohlik’s growth is the close cooperation with its 520 suppliers. “95 percent of our products come directly from the farm or manufacturer and not from middlemen,” emphasizes Björn Christian Wolf, who is responsible for operational business at Knuspr. That is why the delivery service sees itself as a mixture of supermarket and farm shop, which allows it to stand out better from the competition.
The suppliers also benefit from this. “The Knuspr team has a lot of respect for what we do and a high level of appreciation for our products,” confirms Sebastian Brandl from Naturlandhof Brandl, an organic farm in the Munich area. Working together is very straightforward. “That gives us great prospects for the future,” says Brandl.
More: Nimble, Gorillas, Wolt: The boom in grocery delivery services is bypassing many customers